CINCINNATI, Feb 02, 2009 (BUSINESS WIRE) -- Macy's, Inc. (NYSE:M) today announced a series of actions designed to
position the company for increased sales, profitability and cash flow.
These moves will prepare the company for accelerated growth once the
economy recovers while reducing previously planned expenses by
approximately $400 million per year beginning in 2010 (and $250 million
in the partial year of 2009).

"My Macy's," a customer-centric localization initiative piloted in 20
selected geographic markets since spring 2008, will be expanded across
the U.S. As a result, Macy's will drive sales with a compelling
national brand and with stores and merchandise assortments focused on
local customer needs and preferences in each location. (See more
detail in the "My Macy's Expansion" section below.)

As My Macy's is rolled out nationally to new local markets, Macy's,
Inc. will be re-formed into a unified operating structure to support
the Macy's business. This is expected to reduce central office and
administrative expense, eliminate duplication, sharpen execution, and
help the company to partner more effectively with its suppliers and
business partners. Bloomingdale's will remain a separate brand and
organization and is not affected. (See more detail in the "Creating a
Unified Organization" section below.)

Given current economic conditions and expectations for lower sales in
2009, the company is taking other actions to increase profitability
and cash flow. Macy's, Inc. is adjusting its workforce in stores,
distribution centers and various corporate functions, as well as
reducing discretionary spending. Moreover, the Board of Directors has
voted to reduce the Macy's, Inc. quarterly dividend to 5 cents per
share of common stock from the current 13.25 cents. And the company
today commenced a tender offer to redeem $950 million in debt that is
maturing later in 2009. (See more detail in the "Other Actions to
Reduce Expenses and Conserve Cash" and "Paying Down Debt" sections
below.)

A new Macy's, Inc. executive management team will lead the corporation
going forward under the continued direction of Terry J. Lundgren,
chairman, president and chief executive officer. (See more detail in
the "Executive Management Team" section below.)

(Editor's Note: Macy's, Inc. this afternoon also issued a separate
news release providing details of a tender offer for debt maturing later
in 2009. A conference call with analysts and investors will be conducted
at 2:30 pm ET today. Details are provided at the end of this news
release.)

"We have been very encouraged by early results from our My Macy's
district structure in capturing new sales opportunities in pilot markets
over the past year," Lundgren said. "In fact, of the company's top 15
best-performing geographic markets in December, 13 were My Macy's pilot
districts. We are moving quickly and decisively to expand this model to
all of our markets so we can pursue sales-driving opportunities as we
position ourselves to capture share in every local market.

"In addition, and especially in the current challenging economy, we must
operate in a responsible manner that allows us to maximize the value we
offer to our customers and enhance our profitability. That includes
reducing expenses and conserving cash so we can remain financially
healthy. In the short- and long-term, the actions being announced today
will make us a more lean and efficient company and a stronger
competitor," Lundgren said. "With our new structure, Macy's now will
have one unified buying organization, one unified merchandise planning
organization, one unified stores organization, one unified marketing
organization and one unified organization for each corporate function
such as finance, logistics, information technology and human resources -
instead of four of each operating divisionally. By reducing duplication,
we will be able to react faster to market trends, simplify our
relationship with vendors and ensure that our expense dollars are
devoted to activities that will drive the business most effectively."

A net companywide total of approximately 7,000 positions are being
eliminated from the company's workforce in offices, stores and other
facilities. This total includes approximately 1,200 positions being
added to new My Macy's districts and regions.

The net reduction of 7,000 positions represents about 4 percent of the
company's total current workforce of about 180,000 positions. (Note that
the reduction is a much higher percentage in central office functions
being centralized, where nearly 40 percent of executive positions are
being eliminated.) In some cases, the reduction involves positions that
currently are unfilled. Employees whose positions are eliminated will
have the opportunity to express interest in other available positions.
Employees who are laid off in this process will be provided severance
benefits and outplacement assistance.

"Reducing our workforce is an unfortunate outcome of the current
economic environment, and I am frustrated that so many of our people
will be unable to move forward with us as we proceed into a very
exciting future for Macy's and Bloomingdale's," Lundgren said. "Be
assured we will be sensitive to all affected employees, work diligently
to find other positions for as many of them as possible, and treat
everyone with respect and honesty."

My Macy's Expansion

In order to concentrate more management talent in local markets and
reduce "span of control," all Macy's stores nationwide will be grouped
into 69 geographic districts that will average 10-12 stores each,
effective in the second quarter. Of those, 49 will be newly created
districts. The other 20 districts (in the Midwest, Upper Midwest and
Pacific Northwest) were created as pilots in spring 2008 and will remain
in place.

The nationwide district structure will position Macy's to develop and
implement more effective strategies for identifying and serving specific
consumer needs location by location. This is consistent with ongoing
development of customer-centric business initiatives to leverage
knowledge of customer segments to drive same-store sales, profitability
and customer loyalty. Macy's is working in partnership with consumer
insight firm dunnhumbyUSA on these initiatives under an exclusive
arrangement announced in 2008.

In each of the 49 new districts, an average of about 23 new positions -
primarily in district merchandising and planning - will be created at
the local city level to help central planning and buying executives to
understand and act on the needs of local customers. In addition,
district-based executives, including a district vice president, district
merchants, district planners and individual store managers, will be
empowered to make more and better decisions for their local customers.

The 69 Macy's districts will be grouped into eight regions that will be
based in the Chicago, Houston, Miami, Los Angeles, New York, Pittsburgh,
San Francisco and Washington, D.C. areas. Each region will include an
organization of 35 to 40 executives to oversee merchandising, planning
and various support operations. Special events and marketing public
relations staffs also will be located regionally around the country.

In all, a total of approximately 1,200 new district and regional
positions will be created in 2009 as the My Macy's model is rolled out
to the 49 new districts nationwide.

Creating a Unified Organization

As My Macy's is adopted nationally to enhance focus on local markets,
Macy's will become one unified national operation that will streamline
decision-making, strengthen and simplify relations with vendor partners,
and eliminate duplication in functions such as planning and buying,
marketing and stores supervision. The new organization will be in place
beginning in the second quarter of 2009.

Effective immediately, the company will begin the process of eliminating
its Macy's division structure and integrating all functions into a
single organization. Macy's central buying, merchandise planning, stores
senior management and marketing functions will be located primarily in
New York. Corporate-related business functions such as finance, human
resources, law, property development and purchasing - including those
now performed at the division level - will be located primarily in
Cincinnati. While the size and nature of some functions based in New
York and Cincinnati will be adjusted to align with current business
needs while others are centralized for efficiency, Macy's, Inc. net
workforce in these two cities is expected to increase nominally to
support the nationwide Macy's business.

The elimination of existing divisional central office organizations will
primarily affect approximately 1,400 positions at the Macy's West
headquarters offices in San Francisco, approximately 850 positions at
the Macy's Central headquarters offices in Atlanta, and approximately
600 positions at the Macy's Florida headquarters offices in Miami. A
number of executives currently in the Macy's West, Macy's Central and
Macy's Florida central organizations will be reassigned to new region
and district roles, or considered for a number of new positions in New
York and Cincinnati. While New York-based Macy's East will no longer
exist as a division going forward, many members of the current division
merchandising, planning, stores management and marketing staffs will be
part of the new unified organization.

The New York-based Macy's Home Store and Macy's Corporate Marketing
divisions will no longer exist as separate entities. Existing Home Store
functions will be integrated into the Macy's national merchandising,
merchandise planning, stores and marketing organizations. Macy's
Corporate Marketing will be integrated into the new unified marketing
organization. The New York-based Macy's Merchandising Group will be
refocused solely on the design, development and marketing of Macy's
highly successful family of private brands.

Other than the previously announced closure of 11 Macy's stores, all
current Macy's and Bloomingdale's store locations will remain in place,
as will macys.com and bloomingdales.com.

Other Actions to Reduce Expenses and Conserve Cash

The company has begun a process of reducing approximately 5,100
positions nationwide from its stores, distribution centers and offices
so the size of the company's organization is aligned with current
consumer demand and expectations for lower sales in 2009. (These 5,100
positions are included in the total net reduction of 7,000 positions.)
The reduction in store staffs averages five to six positions per
location and is designed to minimize any impact on customer service.

Merit salary increases for executives considered in spring 2009 for
performance in 2008 are being eliminated across the company. The company
also will reduce the level of its match to employee 401(k) plan
contributions in 2009. In addition, management will be recommending to
the Board of Directors a reduction in perquisites for executives,
including merchandise discounts, company cars, company-paid life
insurance and financial counseling.

The Board of Directors has voted to reduce the Macy's, Inc. quarterly
dividend to 5 cents (20 cents annualized) per share of common stock from
the current 13.25 cents (53 cents annualized). The new quarterly
dividend will be payable April 1, 2009, to shareholders of record at the
close of business of March 13, 2009. The reduction in dividend is
expected to conserve $138 million in cash in fiscal 2009.

Debt Reduction

Macy's Retail Holdings, Inc., a wholly owned subsidiary of Macy's, Inc.,
today commenced a cash tender offer to purchase any and all of its
outstanding $950 million in debt that is maturing later in 2009 - $350
million in 6.30% Senior Notes due April 1, 2009, and $600 million in
4.80% Senior Notes due July 15, 2009. The company will use cash on hand
to repurchase and retire the notes through a tender offer process. The
tender offer and debt reduction are intended to eliminate any
uncertainty about the company's ability to handle near-term debt
maturities. Also, by retiring these notes early, the company is expected
to reduce interest expense in 2009. The amount of interest expense
reduction will depend on the amount of notes tendered and repurchased.
(See separate news release issued today for details of the tender offer.)

Executive Management Team

Going forward, Macy's, Inc. will be led by a corporate executive
management team headed by Terry Lundgren, who will continue to be
chairman, president and CEO of the corporation and remain based in New
York. Lundgren's leadership team will include (see bios below for each):

Timothy M. Adams, currently chairman and CEO of Macy's Home Store, who
becomes Chief Private Brand Officer. He will be responsible for the
organization that concepts, designs, sources and markets the company's
portfolio of highly successful private brands;

Thomas L. Cole, currently vice chair of Macy's, Inc., who becomes
Chief Administrative Officer. He will be responsible for operations
functions and non-financial corporate functions, including credit,
logistics, systems, property development, non-merchandise purchasing,
human resources, corporate communications and employee relations. In
addition, Cole will have administrative responsibility for law and
internal audit functions that will report directly to Lundgren;

Mark S. Cosby, currently president and COO of Macy's East, who becomes
President-Stores. He will primarily be responsible for all Macy's
store operations and support functions;

Jeffrey Gennette, currently chairman and CEO of Macy's West, who
becomes Chief Merchandising Officer. He will be responsible for all
buying and merchandising functions for Macy's nationwide, as well as
for relations with market vendor partners;

Julie Greiner, currently chairman and CEO of Macy's Florida, who
becomes Chief Merchandise Planning Officer. She will be responsible
for centralized merchandise planning and assortment allocations by
store, as well as the district/region merchandise planning structure
and function;

Karen M. Hoguet, currently EVP and chief financial officer, who
remains Chief Financial Officer. She will be responsible for all
financial-related activities of the corporation;

Ronald Klein, currently chairman and CEO of Macy's East, who becomes
Chief Stores Officer. He will be responsible for the nationwide
portfolio of Macy's stores, including the My Macy's region and
district organizations;

Peter Sachse, currently president of Macy's Corporate Marketing,
remains the company's Chief Marketing Officer, as well as chairman and
CEO of macys.com.

Michael Gould remains chairman and CEO of Bloomingdale's.

"I constantly hear from our vendor community that Macy's, Inc. has the
most talented team of executives in our industry. I feel very fortunate
to have such a dedicated team of strong executives to lead us into the
future," Lundgren said. "Moreover, through the transition process, we
will benefit from the committed involvement of three corporate vice
chairs who will ensure continuity through the transition to our new
organizational structure. They will stay on until their planned
retirements," Lundgren said.

Vice Chair Thomas G. Cody, 67, will continue to have responsibility
for working with and advising the CEO on issues relating to the Board
of Directors and corporate governance. Cody, who will continue to
coordinate Cincinnati-related activities, also will direct the
company's non-marketing-based philanthropic activities and will remain
president of the Macy's Foundation until his retirement early in 2010.

Vice Chair Janet E. Grove, 58, also currently chairman and CEO of
Macy's Merchandising Group, will facilitate the transition of
merchandising, planning and private brand development functions until
her retirement in mid-2011. In addition, Grove will assume
responsibility for the company's International Retail Store
Development initiatives during this period.

Vice Chair Susan D. Kronick, 57, who currently oversees Bloomingdale's
and Macy's retail divisions, will co-lead the My Macy's integration
(along with Cole). Kronick also will play an integral role in advising
on talent selection and development of the new My Macy's
organizational structure as it is expanded across the country and will
facilitate the transition of stores, merchandising and planning
functions until her retirement early in 2010. Kronick also will
continue to oversee Bloomingdale's throughout 2009.

Financial Aspects

The savings from the actions announced today, net of the amount invested
in localization initiatives, are expected to reduce previously planned
Macy's, Inc. SG&A expense by approximately $400 million per year,
beginning in 2010. The partial-year reduction in SG&A for 2009 is
estimated at approximately $250 million.

Pre-tax costs associated with today's announcements will be
approximately $400 million in cash, most of which are expected to be
taken in fiscal 2009. This will include severance and outplacement
assistance for displaced employees, as well as relocation assistance.

2009 Guidance

While uncertainty in the economy continues to make predictions of future
performance difficult, Macy's, Inc. is assuming a very challenging
environment through the remainder of fiscal 2009. In spite of the fact
that the economic stimulus package currently being considered by
Congress may improve the trend in consumer spending, we are planning
conservatively to ensure our inventory, expenses and capital
expenditures are appropriate. As such, the company currently is assuming
that same-store sales in 2009 will be down between 6 percent and 8
percent.

Including this sales assumption and impact of today's announcements,
Macy's, Inc. is assuming earnings per share on a diluted basis of 40
cents to 55 cents, excluding restructuring-related costs, for fiscal
2009. Should the economic environment improve, we would expect our sales
and earnings to exceed this level.

The company has further reduced its 2009 capital expenditures budget to
approximately $450 million. This is $100 million to $150 million less
than the $550 million to $600 million previously announced, and down
from an original 2009 budget of approximately $1 billion.

Executive Management Bios

Terry J. Lundgren, 56, assumed the title of chairman, president and CEO
of Macy's, Inc. in January 2004. Prior to this, he served as president
and chief operating officer, a title he assumed in March 2003 after
having served as president and chief merchandising officer since May
1997. Lundgren began his retailing career in 1975 as a trainee with
Bullock's in Los Angeles (then a division of Federated Department
Stores, Inc.) and served in positions of increasing responsibility,
including director or stores and SVP/general merchandising manager. In
1987, he was named president and CEO of Bullocks Wilshire, then an
upscale chain of specialty department stores. Lundgren left the company
in 1988 to join Neiman Marcus, where he initially served as executive
vice president and shortly thereafter was named chairman and CEO. He
returned to Federated in April 1994 as chairman and CEO of the Federated
Merchandising Group (now known as Macy's Merchandising Group). Lundgren
lives in New York City.

Tim Adams, 54, joined Macy's Home Store as chairman and CEO in July 2005
after serving as chairman of the Macy's Florida division since April
2001. For the previous five years, he was president of The Bon Marche in
Seattle. Adams began his retail career at Macy's in Atlanta in 1976. In
1989, he joined Macy's West in San Francisco as a merchandise
administrator and rose to become EVP/general merchandise manager in
1994. Adams lives in New York City.

Tom Cole, 60, was elected Macy's, Inc. vice chair in 2003. He has been
responsible for the store design and construction and corporate real
estate functions, as well as the Macy's Logistics and Operations (MLO),
Macy's Systems and Technology (MST) and Macy's Credit and Customer
Services (MCCS) divisions. Previously, Cole was president of Federated
Merchandising Group for six years and served as senior vice president
for financial services at the Lazarus division. He began his career at
Federated in 1972. Cole lives in the greater New York City area.

Mark Cosby, 49, has served as president and chief operating officer of
Macy's East since May 2007. He joined the company's corporate office in
July 2006 as senior vice president for property development. Previously,
Cosby served as president of full-line stores for Sears Roebuck & Co.,
and earlier as chief operations officer of KFC and chief development
officer of Yum Brands, the branded restaurants company spun off from
Pepsico. He began his career as a financial analyst for General Foods
Corporation. Cosby lives in the greater New York City area.

Jeff Gennette, 47, was named chairman and CEO of Macy's West in February
2008 after serving as chairman of Macy's Northwest in Seattle since
December 2005, and executive vice president and director of stores for
Macy's Central in Atlanta since 2004. Previously, he was SVP/general
merchandise manager at Macy's West since 2001. Gennette joined Macy's
West in 1983 as an executive trainee and also has served with FAO
Schwarz and Broadway stores. Gennette currently lives in San Francisco
and will be relocating to New York.

Julie Greiner, 55, was named chairman and CEO of Macy's Florida in July
2005. Previously, she served as senior executive vice president of the
company's Bloomingdale's division and was its director of stores since
April 1998. Greiner began her retailing career in 1975 at J. W.
Robinson's in Los Angeles and rose through positions of increasing
responsibility in the merchandising and stores organizations. She joined
Bloomingdale's in October 1993. Greiner currently lives in Miami and
will be relocating to New York.

Karen Hoguet, 52, was elected EVP and chief financial officer of Macy's,
Inc. in May 2005. Previously, Hoguet served as SVP and chief financial
officer, a position she had held since 1997. Hoguet joined the company
in 1982 from the Boston Consulting Group and served in a range of
financial management capacities, including senior vice president for
planning and treasurer of the corporation. Hoguet lives in Cincinnati.

Ron Klein, 59, was named chairman and CEO of Macy's East in February
2004, after serving as chairman of Rich's/Lazarus/Goldsmith's in
Atlanta. Previously, he served as vice chairman and director of stores
for Macy's East, and chairman of Stern's in New Jersey. Klein began his
retail career in 1974 as a buyer at Bloomingdale's, and served in
merchandising positions of increasing responsibility in several
Federated divisions before moving to Macy's East in 1998. Klein lives in
New York City.

Peter Sachse, 50, has been president of Macy's Corporate Marketing since
May 2007 and chairman and CEO of macys.com since April 2006. He was the
company's first chief marketing officer in June 2003. Prior to serving
in these roles, Sachse was president and COO of The Bon Marche in
Seattle. He began his retail career with Macy's in Kansas City and was
division merchandise manager at Bullock's in Los Angeles. He was also
EVP/general merchandise manager at Macy's East and was later promoted to
vice chair/director of stores of Macy's East. Sachse lives in the
greater New York area.

Macy's, Inc., with corporate offices in Cincinnati and New York, is one
of the nation's premier retailers, with fiscal 2007 sales of $26.3
billion. The company operates more than 840 department stores in 45
states, the District of Columbia, Guam and Puerto Rico under the names
of Macy's and Bloomingdale's. The company also operates macys.com and
bloomingdales.com. Prior to June 1, 2007, Macy's, Inc. was known as
Federated Department Stores, Inc.

All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of Macy's management and
are subject to significant risks and uncertainties. Actual results could
differ materially from those expressed in or implied by the
forward-looking statements contained in this release because of a
variety of factors, including conditions to, or changes in the timing
of, proposed transactions, prevailing interest rates, changes in
expected synergies, cost savings and non-recurring charges, competitive
pressures from specialty stores, general merchandise stores,
manufacturers' outlets, off-price and discount stores, new and
established forms of home shopping (including the Internet, mail-order
catalogs and television) and general consumer spending levels, including
the impact of the availability and level of consumer debt, the effect of
weather and other factors identified in documents filed by the company
with the Securities and Exchange Commission.

(NOTE: Additional information on Macy's, Inc., including past news
releases, is available at www.macysinc.com/pressroom.
A webcast of a Macy's, Inc.'s call with analysts and investors will be
held beginning at 2:30 p.m. ET today (Monday, February 2). The webcast
is accessible to the media and general public via the company's Web site
at www.macysinc.com.
Analysts and investors may call in on 1-888-271-8602, passcode 4183447.
A replay of the conference call can be accessed on the Web site or by
calling 1-888-203-1112 about two hours after the conclusion of the call.)

This section contains press releases issued by Macy’s, Inc. on the date specified. We have not undertaken any responsibility to update the information in these releases and in some instances the information in these releases may be dated.